Judge rules withdrawal of Miami company's claims would cause defendants to be 'materially prejudiced'

By Marian Johns | Jun 14, 2019

MIAMI — A federal judge has denied a Miami Electronic Health Records (EHR) developer's request to withdraw the federal claims it filed against the owners of several Florida companies alleged to have copied its software design, stating it would be a "disservice" to the defendants in the case and "destroy subject matter jurisdiction."

According to the May 29 U.S. District Court Southern District of Florida filing, plaintiff Kipu Systems LLC filed a motion to amend its complaint and withdraw its federal claims against defendants ZenCharts LLC and others in a case involving a dispute over a cloud-based EMR program designed specifically for addiction and treatment facilities. 

Kipu, a Miami company that developed the cloud-based Electronic Medical Records (EMR) program filed suit against the defendants in December 2017 alleging four federal violations among counts that include misappropriation of trade secrets under the Defend Trade Secrets Act, trademark counterfeiting, trademark infringement and unfair competition, according to the court filing. 

Kipu alleges that the owner of a South Florida drug treatment center and his sons, who own a software development and programing company coped Kipu's EMR program through the defendants' creation of "ZenCharts" all while the parties were working together through a software licensing agreement they had entered into. 

Kipu argues that it needs to withdraw two-thirds of its 14 claims after the discover process deadline because of information that was revealed during the discovery process. 

U.S. Magistrate Judge Edwin Torres denied Kipu's order because the court would lose its federal jurisdiction over the case which would then have to be "relitigated in state court" and also concluded that Kipu was not "compelled to litigate" the four federal claims if they find they have "no merit."

Torres also stated that allowing Kipu's federal claims to be withdrawn would cause the defendants to be "materially prejudiced."

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